Government clarified, Center and State Equal stakeholders in GST, revenue will be equally divided
GST News: Amid concerns about the impact on revenue from the Center’s proposed 2 slabs GST (GST), government sources clarified that the Center is a similar partner in revenue sharing with the states. He also said that the next generation of Goods and Services Tax (GST) supports the middle class and it is expected to increase revenue over time due to increasing consumption.
41 percent of states are allocated: EThe time is shared equally between the Revenue Center and the states under the GST structure. In addition, 41 percent of the Center’s share in the divisive tax pool are allocated to the states as per the recommendations of the Finance Commission. A government source said that the Center has equal concerns about what is being collected in GST and what will be collection. Being a member of the GST Council, both the Center and the state are equal partners. In such a situation, is it appropriate to expect that the Indian government will compensate the states?Also Read: How will the next generation be GST, what will be the benefit
At present, GST is a 4 -tier structures with tax rates 5 percent, 12 percent, 18 percent and 28 percent. Food and essential commodities are taxed at the rate of either zero or 5 percent and luxury and harmful items are taxed at the rate of 28 percent.
Total GST Revenue: 5 percent slab has a 7 percent stake. On the other hand, 12 percent slab holds 5 percent, 18 percent of the slab 65 percent and 28 percent of the slab 11 percent.Also Read: 8 years of GST completed, now emphasis will be on ease of increasing business and better compliance
The Center has proposed 5 percent to the group of ministers on GST rate rationalization and a 2-tier rate structure of 18 percent and a rate of 40 percent for about 5-7 items. The proposal involves abolishing the current 12 and 28 percent tax slab. At present, states have special taxation rights on land and petroleum products. Apart from this, the Center is giving 50 years interest free loan for capital expenditure to the states under a special assistance scheme.Also Read: GST has a treasure of government fiercely, collection crosses 2 lakh crores in May
Another source said that the calculation suggests that GST revenue will continue to increase after the new 2 -level slab is implemented. The second source said that similar revenue concerns were raised even when the compensation cessation period was over in June 2022. But over time GST revenue has improved and the taxes received by the states have increased. He said that tax growth will continuously improve with the GST reforms proposed by the Center. (Language)
Edited by: Ravindra Gupta
